Families should be cautious with auto insurance matters affecting young adults, especially considering how expensive coverage can be for these higher-risk drivers. One question many policyholders have is: Should I take my insured child off my auto insurance policy when they are away at college? The answer can depend on several circumstances, such as your child's residence and usage of the car.
In the following paragraphs, we will walk you through the consequences and considerations for both options. In summary:
Keep them on the policy
Take them off the policy
|If||The student will be driving regularly at college, or commuting to or attending a school nearby||The student will be living on campus with no regular access to a car|
|Considerations||The higher cost of having a student under the age of 25 on your policy||The possibility of lacking coverage when they drive an uninsured car or a friend's car without consent|
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Take your student off your policy if:
If they will not be taking an automobile to school — especially if they'll be living on campus and not visiting home often — then it may be better to take your child off your policy. This can possibly decrease your rates by $1,000 to $2,500 annually, depending on your student's age and driving record, said Ron Hettler, president of the Hettler Insurance Agency in Lubbock, Texas.
"However, be aware that many carriers will not allow you to even temporarily exclude a licensed driver in your household who is already listed on the policy," said Hettler.
If your student is allowed to be excluded from the policy, our suggestions are:
- Remember to contact your insurer to add your child back to the policy prior to coming home if they plan to drive while home, such as during winter or summer breaks.
- Discourage them from driving a friend's car while away at school; the friend's insurance should provide primary coverage for your student if they are involved in an accident or moving violation. But the friend's auto policy may lack adequate coverage to safeguard your student and anyone else involved in an accident that they cause.
Kristofer Kirchen, president of Tampa, Fla.-based Advanced Insurance Managers, LLC, said students should get their own separate policy if they permanently live elsewhere (not in their parents' home), particularly if their new ZIP code yields lower rates and they have a vehicle titled in their own name.
To determine which option is best for you, consult with your insurance representative as soon as possible and review your coverage choices carefully.
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Keep your student on your policy if:
If (a) your student plans to bring a vehicle to college and use it, or (b) they are commuting to or attending a nearby school that allows them to come home often and use the car, then you should keep them on the policy.
Whether they plan to drive or not while attending college, many experts suggest keeping your child active and listed on your policy because the student will be:
Covered if/when they:
- Return home and need to drive
- Drive a friend's automobile while away
- Are forced to drive due to an emergency
- Are struck by a car while on foot, on a bike or as a passenger in another person's vehicle
Earning family premium deductions (if eligible), including:
- A good student insurance discount (typically, a "B" average or better is required). "This option can possibly save you a couple hundred bucks or more," said Bob Passmore, assistant vice president of personal lines for the Property Casualty Insurers Association of America.
- A distant student discount (in general, attending school full-time at least 100 miles away and under 23 years old is required), which can save families hundreds of dollars more, Passmore said.
And last but not least, your child will be building a record of uninterrupted insurance coverage, which can possibly reduce premiums when it's time for them to obtain their own policy. In fact, some insurers will reject applicants with no previous history of continuous coverage. If your student will remain on your policy, here are a few things you need to keep in mind:
- Inform your insurer of your child's school status, but indicate your home as their primary address. Students who attend college full-time, even out of state, can typically retain coverage on their parents' policy if the parents' residence is their primary address.
- Ask your insurer if it can assign your child to the least valuable vehicle you own, which can help decrease premiums.
- Stress safe and responsible driving habits, including abiding by rules outlined in the policy, no driving while texting or under the influence of alcohol or drugs, and no lending of the car to a friend.